Trading in Lucid Group (NASDAQ: LCID) stock was halted several times yesterday due to volatility after a publication that follows electric vehicle (EV) companies reported that the company was considering filing for bankruptcy or going private.
Shares plunged more than 50% before reversing course after the company called the report false. Lucid then took it a step further. After releasing a letter to the editor of EV (electric-vehicles.com), Lucid’s stock popped today. As of 10:13 a.m. ET, Lucid shares were up by 17%.
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Investors still need to watch the balance sheet
Lucid’s letter, signed by its chief legal officer, stated: “Lucid unequivocally denies the central factual assertions” that were reported. It also reiterated that it was not considering Chapter 11 bankruptcy protection nor taking the company private.
It also said that the company was looking into the “circumstances surrounding publication” and “all available legal remedies.”
Investors certainly breathed a sigh of relief from this strong response. Lucid reported having about $4.7 billion in liquidity when it reported Q1 results in early May. It is still losing money, however, and that is what investors need to monitor.
Lucid is hoping its new Gravity SUV will help spur demand, and it has also entered a partnership with Uber Technologies to build and deploy a premium, purpose-built global robotaxi fleet using its EV technology.
Look for updates regarding both when the company reports second-quarter results on Aug. 4. That will likely drive where Lucid stock goes from here.
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Howard Smith has positions in Lucid Group. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.
Why Lucid Stock Bounced Back Today was originally published by The Motley Fool
